Gold Prices Flat on Poor Manufacturing Report

NEW YORK ( TheStreet) -- Gold prices were effectively flat on Monday as a poor manufacturing report propped up the yellow metal, which had been losing ground in early morning trading.

Gold for February delivery was adding $1 to $1,698 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,701 and as low as $1,687.50 an ounce, while the spot price was shedding 40 cents, according to Kitco's gold index.

"We saw a small pop on that New York manufacturing data coming in weaker than expected -- thinking maybe quantitative easing going longer than expected," said Phil Streible, senior commodities broker at RJO Futures.

Silver prices for March delivery were gaining 10 cents to $32.38 an ounce, while the U.S. dollar index was losing 0.05% to $79.52.

House Speaker John Boehner (R., Ohio) conceded Friday to raise marginal tax rates on those with incomes of more than $1 million. But the concession included a request for a hike in the Medicare eligibility age and $1 trillion in additional spending cuts. President Barack Obama and Democrats have refused to agree to raise the eligibility age.

Japan's Liberal Democratic Party reclaimed majority power in the National Diet this past weekend, and the victory signaled increased possibility that the new government will enact new stimulus to try and boost economic progress there.

More stimulus would be seen by gold investors as inflationary policy, which would likely give gold a boost as a hedge. The Japanese central bank's most recent round of monetary stimulus, which came on Sept. 19, did give an initial pop to gold prices, but concerns that European leaders wouldn't reach an agreement on a banking union batted down the gains during that session.

Gold mining stocks were mixed on Monday. Shares of Royal Gold ( RGLD) were losing 0.69%, but shares of Randgold Resources ( GOLD) were increasing 0.86%.

Gold's price rally has been a product of demand-side economics, and there is still a considerable amount of interest in gold that is not fully tapped, according to Tom Brady, chief economist at Newmont Mining.